Sales promotions have become one of the preferred methods of marketing communication. However, there is a debate on whether sales promotion has a positive effect on brand awareness and brand loyalty. So, the purpose of this study was to examine the effect of sales promotion on brand awareness and brand loyalty; and the relationship between brand awareness and brand loyalty. The research employed explanatory research design to identify any causal links between sales promotion, and brand awareness and brand loyalty. Primary data were collected from a sample of 389 Walia beer consumers using convenient sampling technique; and data were collected using a five-point Likert-type scale, ranging from ‘strongly disagree’ (1) to ‘strongly agree’ (5). Data were entered into SPSS 20, and analysis of the measurement and structural models were made using AMOS 20. The findings revealed that sales promotion has a positive and significant effect on brand awareness and brand loyalty; and awareness has a positive effect on brand loyalty. This indicates that beyond its usual immediate impact on sales volume, sales promotion has an effect on branding.